How to Get a Government-Backed, Zero-Down-Payment Mortgage

Uncle Sam is offering 100 percent home financing to eligible borrowers through two federal agencies.

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Should veterans run into financial trouble after receiving their loan, the VA offers additional support, White says. "We will work with borrowers to see if they can encourage the services to modify the loan—in some cases we can buy it ourselves and even lower the rate," he says. White credits such efforts for helping VA loans to outperform their government-backed peers. The seasonally-adjusted delinquency rate for VA loans was 7.79 percent in the second quarter of this year, compared with 13.29 percent for FHA-insured mortgages, according to the Mortgage Bankers Association's most recent National Delinquency Survey. (The delinquency rate for prime, fixed-rate loans was less than 6 percent, however.)

White estimates that the VA will back roughly 300,000 loans this fiscal year, which is down from 325,000 in 2009. (The fiscal year ends at the close of September.) Eligible veterans interested in obtaining a VA-backed loan should contact an agency-approved lender.